Nevsun Resources is a gold and base metal explorer/developer with a focus on developing mining projects in Africa. Nevsun is currently focused on advancing its high grade gold, copper and zinc Bisha Project in Eritrea.
Nevsun Resources expects Bisha gold-copper-zinc project to be cash positive in Q1 2011
23rd Feb 2010, 4:22 pm
Nevsun Resources (TSX&NYSE Amex: NSU) said it now expects its Bisha gold-copper-zinc project in Eritrea to be cash positive in Q1 2011 and said there was a considerable potential for resource expansion should metal prices stay above the initially assumed US$400/oz for gold, US$1.05/lb for copper and US$0.50/lb for zinc.
The cash flow model was increased through the elimination of financing costs and debt repayment as a result of financing the project entirely by equity rather than by debt.
The initial economic model assumed a 10 year mine life and was based on a shallow pit model with a depth of 200 metres. If metal price assumptions are increased, the strip ratio will go from the current 4:1 to 5:1 if the pit is redesigned to 400 metres, using prices of US$2.00/lb for copper and US$0.75/lb for zinc compared to the current prices of US$1,100/oz for gold and US$3.30/lb and US%1.00/lb for copper and zinc respectively.
The internal rate of return (IRR) for the project stands at 63% using the high metals case, 45% in the mid metals case and 20% in the low metals case.
In additional to resources open at depth, the company has identified two deposits within its licensed areas. The reserves are currently estimated at 20 million tonnes.
Nevsun has also increased the capital budget by 4% to US$260 million and reported that the Bisha mine was now 50% complete, targeting plant commissioning as early as November 2010.
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